Vodafone launches Google Nexus One in Australia – but can Android really catch the iPhone?

Vodafone will begin selling the Google Nexus One smartphone today, with a relatively quiet launch despite speculation earlier this year the internet giant’s official handset would dominate the sector.

But despite early support for the handset, the Nexus One has failed to sell as many units in the US as Google hoped, and Apple’s iOS platform still dominates the industry despite Android gaining market share.

Vodafone will offer the Nexus One for $0 upfront of the $79 cap 24-month plan. The Nexus features a 3.7 multi-touch screen, a five megapixel camera and a 4GB MicroSD memory card slot, which supports memory of up to 32GB. The handset is also powered by the Android 2.1 software.

The launch comes after the heat has definitely run out of the Nexus One’s hype. While the handset sold 80,000 units in its first month, it had only sold a further 55,000 by March – even though it was advertised on the Google home page.

Additionally, Google’s recent decision to remove the handset from the company’s online store has been seen as an admission of failure.

In comparison, Apple’s new iPhone 4 sold over one million units within three days, following a preorder session in which 600,000 units were reserved for sale. While several tech experts noted the Nexus One was technically superior to the iPhone 3GS in January, the gadget still failed to please the public.

Before the Nexus One announcement on January 7, the tech world was also anticipating another huge announcement – an Apple tablet computer. Wall Street rumours sent Apple shares upwards on nearly a weekly basis, while Google missed out on similar speculative activity.

Some analysts suggested the economic opportunities that would come from a new Apple computer, such as the development of new apps, was behind the tech company’s share price movements. In comparison, a new handset from Google wasn’t that exciting.

However, things might not be so bad for Google overall. Telsyte research director Foad Fadaghi says the Australian launch of the Nexus One may be understated due to the rise of Google’s own Android operating system.

“It’s partially because there are a lot of Android phones on the market now. When the Nexus was first announced it was quite novel. It had the novelty of being an official Google handset, but the actual operating system is now in a number of phones now.”

“The Android OS has become more commonplace and this device won’t get the same sort of attention to it as it might have six months ago.”

Certainly, Android OS sales are improving. Recently Schmidt said more than 160,000 Android-powered phones are being sold every day, saying the software’s momentum was “phenomenal”.

Despite criticisms against the Android OS, including the fact software updates are fragmented between handsets, the product is still gaining market share helped by recent Australian releases including the Motorola Droid and Samsung Galaxy X.

Recent figures from Nielsen show the iOS platform took 28% of the US market in the three months to June, bested online by BlackBerry at 35%. However, Android took on 2% market share during the quarter, with Microsoft Windows Mobile losing 2% to 19%.

Worldwide, Gartner expects Android sales to jump 1.6% this year to beat Windows Mobile, while the iOS platform will take a further 5% to 15.4%.

Fadaghi says Android hasn’t caught up to Apple just yet, but there are signs the OS could pose a serious threat over time.

“Certainly Android phones don’t capture the same sort of headlines Apple phones do, but numbers do show that Android is growing in popularity.”

“One of the things that’s helping that race is that we’re seeing less disruption now. The first iPhone was quite disruptive to the market in what it could do, but now we’re seeing more incremental jumps. Users are demanding features, and they’re getting them. That’s what will allow Android to keep catching up.”